Nordstrom is staffed, stocked and ready to serve as store traffic increases
Happy days are here again. Nordstrom pushed aside the gray cloud hovering over retail the past week with a first-quarter earnings report that shows luxury customers are still shopping despite rising prices — and that everyone else is looking for a deal on the right merchandise.
The retailer reported that net sales were up 18.7 percent year-over-year, exceeding its pre-pandemic performance, as its full line store sales jumped 23.5 percent and Nordstrom Rack’s sales grew by 10.3 percent. Digital sales were flat versus 2021 as the chain reported more customers returning to its physical locations.
CEO Erik Nordstrom said yesterday on the company’s earnings call that a return to occasions such as social engagements, travel and a return to work helped boost sales, as did customers who “reevaluated and refreshed their wardrobes.”
Mr. Nordstrom said unique product selection and outstanding customer service were the keys to the company’s success in the most recent quarter.
“We were staffed, well-stocked and ready to serve customers as store traffic increased. And our dedicated employees delivered an experience that was clearly reflected in our store-level customer satisfaction scores,” he said. “Putting the customer first is in our DNA, and our teams continue to exemplify that spirit this quarter. We’ve always believed that service and selling go together.”
Mr. Nordstrom said that expanded omnichannel capabilities are another key to the company’s performance.
“Customers clearly value our interconnected model, with order pickup comprising 10 percent of Nordstrom.com demand this quarter, an increase of 200 basis points versus the prior year. In Q2, we’ll continue to scale our market strategy by expanding next-day order pickup capabilities to over 60 additional Rack stores in our top 20 markets,” said Mr. Nordstrom.
In-store pickup customers “spend three and a half times more” than those who shop exclusively in Nordstrom’s stores, said Mr. Nordstrom. “Buy online pick up in store also remains our most profitable customer journey and one of our highest satisfaction customer experiences,” he added.
Nordstrom CFO Anne Bramman explained how the company is dealing with inflation.
“We took retail price increases this quarter in response to inflationary pressure and higher MSRP prices from our vendors. At Nordstrom Rack, through our strategic pricing actions, we raised prices on items with the lowest elasticities. Across both banners, we saw minimum unit impact from these pricing actions,” she said.
- Nordstrom Reports First Quarter 2022 Earnings – Nordstrom, Inc.
- Nordstrom (JWN) Q1 2022 Earnings Call Transcript – The Motley Fool
DISCUSSION QUESTIONS: Do you expect Nordstrom’s full-line and Rack stores to continue doing well through the rest of 2022, even if inflation persists? How do the company’s two banners stack up against rivals in the department store and off-price verticals?